United States: Fifth Circuit Green Lights Remand Of Red Light Case

Many of us have received a ticket for running a red light. Few have made a federal case out of it. Meet James Watson. He will be forever immortalized in the case of Watson v. City of Allen, No. 15-10732, 2016 U.S. App. LEXIS 8367 (5th Cir. May 5, 2016).

Watson received a citation after his vehicle was photographed running a red light. He was not driving the vehicle at the time of the infraction and was, in fact, out of state. Watson paid the penalty and then brought a class action against the State of Texas, cities using the cameras and the private companies that administer the cities' red light camera programs, alleging violations of the Texas Constitution, various state laws and the federal Racketeer Influenced and Corrupt Organizations Act (RICO).

Watson filed his action in state court. Defendants then removed it to federal court based on the RICO claim and the Class Action Fairness Act of 2005 (CAFA), which generally speaking, provides federal district courts with original jurisdiction to hear a class action if the class has more than 100 members, the parties are minimally diverse and the matter in controversy exceeds $5,000,000. Watson amended his complaint to drop the RICO claim and moved to remand.

The district court denied remand after dismissing claims against all but three of the defendants—the State of Texas, the City of Southlake and Redflex—finding that the motion was untimely and that the exercise of supplemental jurisdiction was warranted.

The Fifth Circuit reversed and remanded with instructions to send the case back to the state court from whence it came. In so doing, the Court laid out several rules, some of first impression in the Fifth Circuit.

Was the motion to remand timely?

The district court found Watson's remand motion untimely because it was filed more than thirty days after the case's removal and because it was not filed within a "reasonable amount of time." The 30-day deadline applied by the district court is found in 28 U.S.C. § 1447(c), which provides: "A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a)." Joining all other circuits that have considered the issue, the Fifth Circuit holds that Section 1447(c) does not apply to remand motions based on CAFA's mandatory abstention provisions. In other words, invocation of CAFA's local controversy and home state exceptions did not implicate a "defect" subject to this 30-day deadline. Because Watson's motion to remand was based on a mandatory abstention provision rather than a "defect," Section 1447(c)'s 30-day deadline did not apply.

The next issue was, if the 30-day deadline did not apply, what deadline did? Prior to the enactment of a 30-day deadline, a motion to remand was untimely only if it was filed after a reasonable time had elapsed or after the taking of affirmative steps in federal court. The Fifth Circuit agreed with other circuits that "[t]his rule continues for remands not covered by § 1447(c)."

The Court found that the fifty-two days that it took Watson to file the motion were reasonable, given that he had the burden of obtaining evidence to support the motion. Accordingly, it concluded that the district court erred by deeming Watson's remand motion untimely.

Did the home state exception to CAFA apply?

Next, the Court considered whether the "home state" exception to CAFA precluded the exercise of jurisdiction. Cases removed to federal court pursuant to CAFA must be remanded if "two-thirds or more of the members of all proposed plaintiff classes in the aggregate, and the primary defendants, are citizens of the State in which the action was originally filed." 28 U.S.C. § 1332(d)(4)(B). Because appellees did not dispute that at least two-thirds of the proposed plaintiffs were citizens of Texas, the home state exception applied if all of the primary defendants were citizens of Texas. The only defendants who were not citizens of Texas were the private companies who administered the cameras. Because the suit's primary thrust was to declare unconstitutional the Texas red light camera legislative scheme, the Court concluded that those companies were not primary defendants and thus the home state exception applied.

Did the district court properly exercise supplemental jurisdiction?

Having determined that CAFA would not support the exercise of diversity jurisdiction over the action, the Court next considered whether the district court properly exercised supplemental jurisdiction over Watson's state law claims. Citing the general rule that "a court should decline to exercise jurisdiction over remaining state-law claims when all federal-law claims are eliminated before trial," the Court found that the exercise of supplemental jurisdiction was an abuse of discretion.

In the Court's view, state claims substantially predominated over the federal claim, which has been dismissed, and considerations of judicial economy favored remand. This was so because, despite substantial pretrial activity, the parties' work product could be taken, with little loss, to the state litigation. Moreover, Watson's lawsuit concerned a novel Texas state law issue with no Texas Supreme Court guidance. "Texas courts have a strong interest in deciding whether Texas legislation comports with the Texas Constitution (and in defining the contours of state law standing)." Because the lawsuit touched on multiple issues of state importance while impacting no federal policy, the Court concluded that considerations of comity weighed in favor of remand. Even if Watson's maneuvering evinced attempted forum manipulation, said the Court, it was insufficient to overcome factors weighing in favor of remand.

Thus did a humble traffic ticket give rise to rulings on important issues of federal procedure.

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